February 05, 2005

Reading the Vanishing Newspaper, 1: The Influence Model

In preparation for sharing a panel with Philip Meyer, the University of North Carolina journalism professor who has been a longtime advocate of the link between quality journalism and profitability, I'm reading his new book, "The Vanishing Newspaper, Saving Journalism in the Information Age," which sets out to prove that very point.

Meyer writes in the introduction (all emphasis is mine):

"This book is an attempt to isolate and describe the factors that made journalism work as a business in the past and that might also make it work with the changing technologies of the present and the future. … The main value of the work that follows is that it offers a model for looking at the news business that supports our intuitive appreciation for quality and, most importantly, can be transferred to whatever strange forms of media will convey news in the future."

The Vanishing Newspaper addresses some fundamental questions about the newspaper business, including the soundness of the core business model in an age of media demassification, and has drawn considerable attention among journalism watchers (me included), partly because of Meyer's recent essay in the Columbia Journalism Review, "Saving Journalism."

Follow along, for chapter-by-chapter posts.

The Influence Model

Meyer begins by reprising much his earlier work on the theory that newspapers are "in the influence business," not the news or information business. He relies on a business argument called the Influence Model (conceived by former Knight Ridder executive Hans Hal Jurgensmeyer) that posits: Quality journalism increases social influence and credibility, which in turn drive circulation and profitability.

The 40-year calving of mass media into smaller and smaller chunks - a process accelerated exponentially by the growth of the Internet - has created a wealth of information that, quoting the Nobel Prize-winning economist Herbert Simon:

"... creates a scarcity of whatever it is that information consumes. What information consumes is rather obvious: it consumes the attention of its recipients. Hence a wealth of information creates a poverty of attention."

In less wonkish terms, consumers, inundated by wave upon wave of emerging media, are retreating from the mass and seeking refuge in niches that meet a basic need to know about the surrounding world but also satisfy a more specific desire for information about their particular interests.

How has the newspaper industry responded to these challenges and the declining market penetration that have resulted from them?

Badly, says Meyer.

"The main response of the newspaper industry to the threat of substitute technology (ed note: The inevitable disruptive force that attacks every industry) has been to reduce costs and raise prices." Further driven by increasing consolidation and short-term financial pressures, newspapers have done everything to fortify the bottom line but the one thing that may actually keep their influence strong: "Pay the costs of the radical experimentation needed to learn what new media forms will be viable." In other words, the industry has refused to take a short-term hit on its historical double-digit margins in order to invest in a chance for long-term survival.

The newspaper industry's drive for profit at the expense of good journalism - profits rose 207 percent between 1991 and 2000 while newsroom budgets crept upward only 3 percent in the same period - feeds a cycle that "will in time erode public trust, weaken societal influence, and eventually destabilize circulation and advertising. So why would anyone want to cut quality?"

Good question. One answer, says Meyer, is that there are "many bad newspapers" that make money. Another, he suggests, is that some news companies are, in the words of Harvard professor Michael Porter, "harvesting market position." Meyer explains this tactic in his Columbia Journalism Review essay:

"Managers do it by raising prices and reducing quality so they can shell out the money and run. I know of no newspaper companies that are doing this consciously, but the behavior of most points in this direction: smaller news hole, lighter staffing, and reduced community service, leading, of course, to fading readership, declining circulation, and lost advertising. Plot it on a graph, and it looks like a death spiral."

Meyer is not all gloom. He finds a few photons of sunshine in the connection between community journalism and credibility. "Smallness in size contributes to credibility, which in turn aids" penetration, he writes, and from this comes advice for editors of larger newspapers:

"They can at least try to imagine way to manage a larger newspaper that would yield some of the effects of a smaller community. Zoning is one obvious way. Encouraging citizen participation in the affairs of the larger community, a goal of the civic journalism movement, is another."

There are other ways, of course, some of which I tossed out in raw format in Explode the Newsroom: Six Ways to Rebuild the System, and all require a fundamental re-examination of the way newspapers do journalism. Traditional antidotes like zoning may produce short-term readership and advertising successes, but they fail to address the inherent structural and cultural issues of newspaper newsrooms that inhibit the bold thinking necessary to transform newspapers from an institutional on the verge of complete disruption into one willing risk substantial investment in its own relevance.

Good introduction to the concept, Tim. Out of respect for its orginator, I'd like to correct your fumble on his name. It's Hal Jurgensmeyer, not Hans.

Phil Meyer

Posted by: Phil Meyer on February 24, 2005 01:22 PM

I am only a college student in an introductory class to mass media, but I feel there is something to this essay. I am writing a paper about how to specifically help newspapers survive the 21st century and was impressed by the idea at the end to run larger papers more like smaller community papers. I was a paper boy for four years. I saw my circulation drop until the route was completely abondoned after I quit delivering. It was a larger paper (The Sacramento Bee) and they were trying to lower costs by combing all the routes in my town to one auto route. I delivered the paper onto the porch before the change. After this money saving scheme went into effect and the paper no longer landed on the porch by the hands of a young paper boy trying to make money to go to scout camp, everyone just quit taking the paper. I would like to go back and find out exactly why now that I think about it but I am pretty sure the customers felt like the paper had betrayed them and lost that connection with them. It is just a thought. thanks for your time.